Preface to Tenth Edition xv
PART I INTRODUCTION 1
1 The Concept of Strategy 3
Introduction and Objectives 4
The Role of Strategy in Success 4
The Basic Framework for Strategy Analysis 9
A Brief History of Business Strategy 12
Strategy Today 15
How Is Strategy Made? The Strategy Process 21
Strategic Management of Not-For-Profit Organizations 25
Summary 28
Self-Study Questions 29
Notes 30
PART II THE TOOLS OF STRATEGY ANALYSIS 33
2 Goals, Values, and Performance 35
Introduction and Objectives 36
Strategy as a Quest for Value 37
Profit, Cash Flow, and Enterprise Value 41
Putting Performance Analysis into Practice 43
Beyond Profit: Values and Corporate Social Responsibility 51
Beyond Profit: Strategy and Real Options 55
Summary 58
Self-Study Questions 59
Notes 60
3 Industry Analysis: The Fundamentals 63
Introduction and Objectives 64
From Environmental Analysis to Industry Analysis 64
Analyzing Industry Attractiveness 66
Applying Industry Analysis to Forecasting Industry Profitability 76
Using Industry Analysis to Develop Strategy 77
Defining Industries: Where to Draw the Boundaries 80
From Industry Attractiveness to Competitive Advantage: Identifying Key Success Factors 82
Summary 86
Self-Study Questions 87
Notes 87
4 Further Topics in Industry and Competitive Analysis 90
Introduction and Objectives 91
Limits of Industry Analysis 91
Beyond the Five-Forces: Complements, Ecosystems, and Business Models 93
Competitive Interaction: Game Theory and Competitor Analysis 99
Segmentation and Strategic Groups 107
Summary 112
Self-Study Questions 113
Notes 114
5 Analyzing Resources and Capabilities 113
Introduction and Objectives 114
The Role of Resources and Capabilities in Strategy Formulation 114
Identifying Resources and Capabilities 118
Appraising Resources and Capabilities 126
Developing Strategy Implications 130
Summary 136
Self-Study Questions 137
Notes 138
6 Organization Structure and Management Systems: The Fundamentals of Strategy Implementation 144
Introduction and Objectives 145
Strategy Formulation and Strategy Implementation 146
The Fundamentals of Organizing: Specialization, Cooperation, and Coordination 149
Developing Organizational Capability 153
Organization Design 156
Summary 165
Self-Study Questions 165
Notes 166
PART III BUSINESS STRATEGY AND THE QUEST FOR COMPETITIVE ADVANTAGE 165
7 The Sources and Dimensions of Competitive Advantage 167
Introduction and Objectives 168
How Competitive Advantage Is Established and Sustained 168
Types of Competitive Advantage: Cost and Differentiation 178
Cost Analysis 178
Differentiation Analysis 186
Implementing Cost and Differentiation Strategies 197
Summary 200
Self-Study Questions 200
Notes 201
8 Industry Evolution and Strategic Change 205
Introduction and Objectives 206
The Industry Life Cycle 207
The Challenge of Organizational Adaptation and Strategic Change 216
Managing Strategic Change 221
Summary 235
Self-Study Questions 236
Notes 237
9 Technology-based Industries and the Management of Innovation 241
Introduction and Objectives 242
Competitive Advantage in Technology-intensive Industries 243
Strategies to Exploit Innovation: How and When to Enter 250
Standards, Platforms, and Network Externalities 255
Platform-based Markets 258
Implementing Technology Strategies: Creating the Conditions for Innovation 262
Accessing External Sources of Innovation 263
Summary 269
Self-Study Questions 270
Notes 271
10 Competitive Advantage in Mature Industries 273
Introduction and Objectives 274
Competitive Advantage in Mature Industries 274
Strategy Implementation in Mature Industries: Structure, Systems, and Style 280
Strategies for Declining Industries 282
Summary 286
Self-Study Questions 286
Notes 287
PART IV CORPORATE STRATEGY 289
11 Vertical Integration and the Scope of the Firm 291
Introduction and Objectives 292
Transaction Costs and the Scope of the Firm 293
The Benefits and Costs of Vertical Integration 294
The Benefits from Vertical Integration 297
The Costs of Vertical Integration 298
Applying the Criteria: Deciding Whether to Make or Buy 302
Designing Vertical Relationships 302
Different Types of Vertical Relationship 304
Choosing among Alternative Vertical Relationships 305
Recent Trends 306
Summary 307
Self-Study Questions 307
Notes 308
12 Global Strategy and the Multinational Corporation 311
Introduction and Objectives 312
Implications of International Competition for Industry Analysis 313
Analyzing Competitive Advantage in an International Context 315
Internationalization Decisions: Locating Production 318
Internationalization Decisions: Entering a Foreign Market 322
Multinational Strategies: Global Integration versus National Differentiation 324
Implementing International Strategy: Organizing the Multinational Corporation 331
Summary 337
Self-Study Questions 338
Notes 339
13 Diversification Strategy 341
Introduction and Objectives 342
Motives for Diversification 343
Competitive Advantage from Diversification 348
Diversification and Performance 352
The Meaning of Relatedness in Diversification 355
Summary 356
Self-Study Questions 357
Notes 358
14 Implementing Corporate Strategy: Managing the Multibusiness Firm 361
Introduction and Objectives 362
The Role of Corporate Management 363
Managing the Corporate Portfolio 363
Managing Linkages Across Businesses 366
Managing Individual Businesses 369
Managing Change in the Multibusiness Corporation 376
Governance of Multibusiness Corporations 381
Summary 386
Self-Study Questions 386
Notes 387
15 External Growth Strategies: Mergers,Acquisitions, and Alliances 389
Introduction and Objectives 390
Mergers and Acquisitions 391
Strategic Alliances 401
Summary 406
Self-Study Questions 407
Notes 407
16 Current Trends in Strategic Management 409
Introduction 410
The New Environment of Business 410
New Directions in Strategic Thinking 415
Redesigning Organizations 419
The Changing Role of Managers 422
Summary 424
Notes 424
CASES TO ACCOMPANY CONTEMPORARY STRATEGY ANALYSIS, NINTH EDITION 427
1 Tough Mudder Inc.: The Business of Mud Runs 435
2 Starbucks Corporation, May 2015 442
3 Kering SA: Probing the Performance Gap With LVMH 459
4 Pot of Gold? The US Legal Marijuana Industry 466
5 The US Airline Industry in 2015 472
6 Wal-Mart Stores, Inc., June 2015 487
7 Harley-Davidson, Inc., May 2015 502
8 BP: Organizational Structure and Management Systems 516
9 AirAsia: The World’s Lowest-cost Airline 523
10 Chipotle Mexican Grill, Inc.: Disrupting the Fast-food Business 533
11 Ford and the World Automobile Industry in 2015 542
12 Eastman Kodak’s Quest for a Digital Future 557
13 Tesla Motors: Disrupting the Auto Industry 576
14 Video Game Console Industry in 2015 587
15 New York Times: The Search for a New Business Model 598
16 Eni SpA: The Corporate Strategy of an International Energy Major 608
17 American Apparel: Vertically Integrated in Downtown LA 628
18 Chipotle Mexican Grill, Inc.: The International Challenge 639
19 Haier Group: Internationalization Strategy 645
20 The Virgin Group in 2015 655
21 Google Is Now Alphabet—But What’s the Corporate Strategy? 668
22 Jeff Immelt and the New General Electric 681
23 Bank of America’s Acquisition of Merrill Lynch 702
24 W. L. Gore & Associates: Rethinking Management? 718
Glossary 727
Index 735
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